Great Wall Motor Co Ltd - the mainland's largest SUV (sport utility vehicle) maker - slumped by the most in more than 14 months in Hong Kong trading on Monday after the board approved a plan to raise up to $2.7 billion in a private share placement.

Shares of the company, which listed on the Hong Kong Stock Exchange (HKSE) in 2003, fell 13 percent to HK$32.95 at the close - its biggest drop since May 9 last year, as the benchmark Hang Seng Index rose 1.3 percent.

The maker of the mainland's best-selling SUV model is raising funds to pay for the research and development of new-energy vehicles. Policymakers are tightening fuel standards and promoting electric vehicles in order to control pollution and reduce reliance on imported oil.

"We continue to see significant capital expenditure requirements for Great Wall given its endeavor in new energy vehicles, but we expect its sales growth to slow down," said Yang Song, a Hong Kong-based analyst at Barclays Plc. "Its sales growth, especially its sales of higher end models, has been less than our and the market's expectations."

Great Wall's board approved the proposal to issue as many as 387 million A shares in Shanghai at 43.41 yuan ($7) each to fewer than 10 securities investment and management companies, the company told the HKSE on July 10.

The company, based in Baoding, Hebei province, plans to spend 5.08 billion yuan on the research and development of new-energy vehicles, and work on transmission and battery systems for new energy vehicles.

Great Wall twice announced price cuts for its vehicles last month, as sales slowed in the country, with auto sales falling for the first time in more than two years in June.

The mainland slashed its forecast for vehicle sales in the world's largest market last week, projecting deliveries to expand at the slowest pace in four years amid a stock-market rout that threatens to dent consumer sentiment.

Great Wall halted trading on June 18 pending the announcement of the private share plan before resuming trading on Monday. During the suspension, the Shanghai Composite declined 13 percent as part of a broader market rout.

(HK Edition 07/14/2015 page6)